Chesterfield Manufacturing Co. v. Dehon

Parker C. J.

delivered the opinion of the Court. We can perceive no ground- to distinguish this case from that of Denston v. Perkins et al. recently decided by this Court, except the release signed by the plaintiffs in consideration of the assignment, and the evidence in regard to the usage of commission merchants in the sale of goods consigned to them.

With respect to the release, we do not see that it can operate to bar or extinguish the plaintiffs’ claim. All the property of Vila & Co. was transferred to trustees for the use of their creditors who should release them. The assignment would not in law transfer goods and merchandise intrusted to them, as factors, to sell; for the consignors’ property remains in the goods, and in the proceeds of them, saving the lien which the factor may have for advances and expenses.1 The consignors may pursue the goods, or the price of them, notwithstanding such assignment. If it were not so, the property of the consignors, sold and unsold, would go to pay other creditors, who cannot be presumed to have trusted a factor on the faith of goods merely intrusted to him for sale. The release is of debts due from Vila & Co. This ought not to be construed to be a relinquishment of the plaintiffs’ right to goods which Vila & Co. held in trust, or to the notes which they had taken from purchasers for the plaintiff.

It is said that according to the usage proved, the factor has such a control over the notes as would be "nconsistent with the claim of property by the consignors ; but we see no such inconsistency. No doubt the factor may, by breach of trust, or even with the implied assent of consignors, trans-*10lei ,ii& notes, or have them discounted to raise money, arid innocent indorsees will hold them against the consignors; but while they remain in his hands, or in the hands of his trustees, as in the case before us, the consignees may assert their right, either against the trustees, or the purchasers of Uie goods, if they have not made payment. It is said that the giving of a negotiable note by the purchasers is a payment,1 and that this distinguishes the case from Scott v. Surman, Willes, 400; but suppose the debt to be paid by the note, the note does not thereby become the property of the factor.2

If the consignor cannot obtain the notes to sue the promisors, a difficulty might arise ; but that would be between him and the vendee. The factor is still the trustee of the consignor, and a court of equity, with full powers, would reach the notes or the proceeds in his hands. But wnen he has received the money, or it has been paid to his trustee, the powers of a court of equity are not wanting to do justice.3 No doubt it will sometimes be difficult to distinguish the proportions belonging to many consignors, when the price of different parcels of goods has been consolidated into one note, but to this objection it is answered, as it was in the case of Denston v. Perkins et al., that here the plaintiffs’ interest's distinguished, and there is now no difficulty.

Judgment for the plaintiffs.

See as to this lien and the interest which the assignees would have in it, Denston v. Perkins, 2 Pick. (2d ed.) 87, n. 1; Thompson v. Perkins, 3 Mason, 241; 2 Kent’s Comm. (3d ed.) 640.

See Whitcomb v. Williams, 4 Pick. (2d ed.) 231, n. 1.

See 2 Kent’s Comm. (3d ed.) 623; Beckwith v. Sibley, 11 Pick. 484.

See 1 Story’s Comm. Eq. 442 to 449.